The Collaborative Approach : Following the Finnish Example

Editor's Note : The current
economic crisis in the United States has provoked strong responses
and reactions against organized workers, including the targeting of
pensions, benefits, and wages that were previously collectively
bargained. As both organized labor
and employers search for creative ways to address the crisis, UWS
correspondent Stephen Holmes, through his
recent interviews with Finnish Labor officials, details that country's
approach.

By Stephen Holmes, UWS Correspondent

On a recent trip to Finland, I was fortunate enough to have the
opportunity to sit down on separate occasions with two
representatives of Finnish Trade Unions: Mr. Reijo
Paananen
who is Adviser for European Union Affairs, and Member of the European
Economic and Social Committee (EESC) for SAK
(The Central Organisation of Finnish Trade Unions), and Ms. Liisa
Folkersma,who is the International Secretary for AKAVA
(Confederation of Unions for Professional and Managerial Staff in
Finland). Both were helpful in explaining how their system is
organized differently than ours, and how their different
confederations are dealing with the current economic struggles in
Finland and Europe.

The current
consensus that governs how Finland’s workers are represented formed
at the end of World War II. The intent is to make workers,
employers, and the government equal partners in deciding :

how work is
organized

what
constitutes an acceptable wage and benefit package for a particular
industry

the overall
role of government in people’s working lives

Mr. Paananen gives a
clear example of how this consensus works: Union, employers, and the
government will together calculate wage increases in view of other wages, tax
policy, and the cost of living so that it does not cause inflation.
This system has served Finland well for almost seventy years as the
country enjoys one
of the highest standards of living in the world , but it has come
under internal and external pressure to change in recent years.

The Finnish system
makes it very easy for workers to organize themselves into unions
and, correspondingly, for employers to organize themselves into
professional associations. When a majority of workers in an industry affiliate
with a union, that union begins negotiations with the employer's
association that represents that industry. Once an agreement is
reached, the contract becomes binding on all workers and employers
in the industry whether they belong to the union or the
employer’s association or not. (Non-majority agreements would be
possible between unions and employers, but their agreements would not
be binding on the industry as a whole). The SAK publication
"Together”
explains this entire process in clear language. In other words, a
retail clerk in a convenience store is paid the same and enjoys the
same benefits as one working in an expensive shop. All a new worker
needs to do to join the union is sign up with the respective union.
Mr. Paananen says that according to the latest data it is
approximately 72%
in Finland.

One obvious question is : if you don’t need to be a union member to
enjoy the benefits of a union contract, then why join and pay dues?
This dilemma is handled in a variety of ways. First there are
increased unemployment benefits for union members as well as the
benefit of having a union representative to advocate for you in the
workplace. Secondly, many unions also act as professional development
centers for their members. The biggest reason, however, that most
people join is that they are invested in the system and in its
benefits. That does not mean that unions do not work hard to organize
new members. Ms. Folkersma relates that an Akava affiliated unions
spend a good deal of time and money performing outreach to university
students in fields they represent, including yearly tours and
presentations to potential members.

The other large
problem for Finnish unions is that the consensus has started to break
down slightly on the employers end. In the past all the industry
contracts were negotiated at the same time which ensured solidarity
among all workers, but recently contracts have started to be
negotiated at different times which means that not all workers are
negotiating at the same time. Despite this, however, there is no push
to radically change the system as it currently exists, and unions are
overwhelmingly supported. Mr. Paananen told me that SAK’s view is
that in case of a job action the work, not the worker, is considered
to be on strike and that any picket lines are respected by almost
everyone.

In addition to
internal changes, the Finnish system has also come under external
pressure. The largest one is membership in the EU (European Union).
This has led to at least two major challenges. The first is that the
EU guarantees free movement of EU citizens to work anyplace within
the EU. This means that workers who are willing to work for less can
come to Finland legally. Technically, the industry wide agreements
should ensure that they work under rules as other workers, but the
reality is that many are exploited due to language or cultural
barriers or ignorance of their rights under the law. This is similar
to the plight of some immigrants, both documented and undocumented,
in the United States. In fact, Ms. Folkersma praised unions in
America for hiring organizers that speak different languages and
performing outreach to immigrants and said it was a step Finnish
unions needed to take.

The second challenge
is that Finland is part
of the Eurozone which means they share a common currency with 16
other countries. This has a number of implications, but it boils down
to the fact that Finnish workers' wages and purchasing power are tied
to what happens in the other 16 European countries.

To successfully
handle these twin challenges, Finnish unions take a two pronged
approach. The first is that they work closely with the government to
ensure that workers in Finland are protected. Mr. Paananen provides
examples of the Finnish government requiring that any loans given to any
European countries in distress be guaranteed, thus ensuring that workers
won’t have to pick up the cost if the other country defaults.
Additionally, the government has resisted the creation
of Eurobonds
which could affect Finland’s credit rating and lead to higher
interest payments. The second is that Finnish labor affiliates work
with other European labor unions, on a formal level through
organizations like the European Trade
Union Congress, to ensure that labor unions across Europe work together to protect all members' rights.

Ultimately, Finland
has a trade union
system that is radically different from the one in the United
States. The Finnish system of organized labor is built on consensus
and trust, as opposed to the United States' more adversarial one. Finnish Trade
Unions work cooperatively with employers and the government to ensure
all parts of the economy are in harmony. This has resulted in high
union density and a high standard of living with generous social
benefits. There are obvious lessons that the US could take from this.

Further
reading: Mr. Paananen and Ms. Folkersma were extremely generous not
only with their time but also with background material about their
respective confederations which I have provided below: